Technology-Enabled

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Technology-Enabled

12/15/2014

Logistics represent a huge — and expensive — aspect of doing business in the United States. According to the Lombard, Ill.-based Council of Supply Chain J Management Professionals (CSCMP), U.S. logistics-related expenditures are larger than the national gross domestic product (GDP) of all but 12 countries.

But the logistics industry continues to streamline operations. In 1980, logistics represented 17.9 percent of the U.S. GDP, the council says. Today, that percentage is only 7.7 percent, translating into cost savings for U.S. retailers, including cost savings tied to the store brand product supply chain.

Trends with traction

Current trends within the logistics industry include technology advances that are improving supply chain visibility.

“Real-time positional tracking technology has rapidly proliferated the supply chain industry in the last few years,” notes Dan Sanker, president and CEO of CaseStack, Santa Monica, Calif. “The most prominent application of this technology is in shipment tracking. Mobile devices fitted with GPS technology are now cheaper and more accessible than ever.”

The result? Each SKU can be tracked in real time as it moves through the supply chain — a level of visibility that did not exist only a few years ago, he adds.

“We can now easily track products as they are in the manufacturing process, on the ocean, in the warehouse, in trucks and on their way to retail,” Sanker explains. “In addition, we can track what happens inside warehouses, and we can move pallet rack configurations and product around on the fly, yet still connect directly into our warehouse management systems in real time.”

Trends on the horizon

Innovations keep coming on the logistics front — and that’s a good thing. When a company adopts a new distribution or logistics innovation, its stock price increases, CSCMP says, citing a study by Dr. Thomas Speh of Miami University of Ohio.

Looking ahead, increased speed will be a continuing trend.

“Everything is becoming faster,” Sanker says. “We can use cloud-based technology to manage everything inside our buildings. The visibility and dynamic capabilities enable us to maximize every square foot of warehouse space and every inch of truck space. Less waste equals more efficiency [and] equals lower costs for consumers.”

Easy information sharing among manufacturers, retailers, trucking companies, warehouses and other partners also has the potential to improve service levels and reduce waste, he says. And positional tracking should expand beyond its current uses to actually help retailers track customer movements inside retail stores, especially considering that big tech players such as Apple have entered this arena.

“Using this data, the retailers can deduce information like store brand loyalty, aisle traffic, durations, etc.,” Sanker says.

He adds that supply chain management has become one of the most important and game-changing professions for today’s graduating college students.

“The prize is large — companies spend a lot on supply chain; the technology has changed — it is sophisticated and capable; and the career opportunities are abundant and meaningful,” Sanker says. “This is quickly becoming an industry for the best and the brightest.”

When a company adopts a new distribution or logistics innovation, its stock price increases.

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